Critical Analysis: AFC Gamma (NASDAQ:AFCG) & CaliberCos (NASDAQ:CWD)

CaliberCos (NASDAQ:CWD) and AFC Gamma (NASDAQ:AFCG) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares CaliberCos and AFC Gamma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CaliberCos	-16.19%	-13.83%	-5.03%
AFC Gamma	13.69%	12.93%	8.42%

Analyst Recommendations

This is a summary of current recommendations for CaliberCos and AFC Gamma, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CaliberCos	0	0	0	0	0.00
AFC Gamma	0	2	1	1	2.75

AFC Gamma has a consensus price target of $11.00, indicating a potential upside of 13.75%. Given AFC Gamma’s stronger consensus rating and higher possible upside, analysts clearly believe AFC Gamma is more favorable than CaliberCos.

Volatility and Risk

CaliberCos has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, AFC Gamma has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Institutional & Insider Ownership

4.1% of CaliberCos shares are owned by institutional investors. Comparatively, 26.5% of AFC Gamma shares are owned by institutional investors. 42.3% of CaliberCos shares are owned by company insiders. Comparatively, 26.2% of AFC Gamma shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares CaliberCos and AFC Gamma”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CaliberCos	$90.94 million	0.13	-$12.70 million	($0.50)	-1.04
AFC Gamma	$64.18 million	3.31	$20.95 million	$0.40	24.18

AFC Gamma has lower revenue, but higher earnings than CaliberCos. CaliberCos is trading at a lower price-to-earnings ratio than AFC Gamma, indicating that it is currently the more affordable of the two stocks.

Summary

AFC Gamma beats CaliberCos on 13 of the 15 factors compared between the two stocks.

About CaliberCos

Caliber (NASDAQ: CWD) is a vertically integrated alternative asset management firm whose purpose is to build generational wealth for investors seeking to access opportunities in middle-market assets. Caliber differentiates itself by creating, managing, and servicing proprietary products, including middle-market investment funds, private syndications, and direct investments which are managed by our in-house asset services group. Our funds include investment vehicles focused primarily on real estate, private equity, and debt facilities. Additional information can be found at Caliberco.com and CaliberFunds.co.

About AFC Gamma

AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other various commercial real estate loans and debt securities for established companies operating in the cannabis industry. It primarily originates loans structured as senior loans secured by real estate, equipment, and licenses and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties. The company has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. AFC Gamma, Inc. was incorporated in 2020 and is based in West Palm Beach, Florida.